RFA: Fuel demand begins recovery, poll finds support for biofuel

By Erin Voegele | May 15, 2020

The Renewable Fuels Association on May 15 held a media call to discuss market impacts of COVID-19, recent polling results that show strong support for biofuels, the need for federal relief for biofuel producers, and barriers to hand sanitizer production.

Geoff Cooper, president and CEO of the RFA, noted the U.S. ethanol industry was producing fuel at an annualized rate of 16.5 billion gallons in February, prior to the COVID-19 crisis. By late April, the rate of production had fallen to 8.2 billion gallons as the pandemic caused demand for transportation fuels to plummet.

“There is some good news,” Cooper said. “It seems that the worst may be behind us. We’re beginning to see some signs of recovery as states begin to ease stay at home restrictions and people begin to return to public spaces and get back out on the roads.”

“Gasoline demand is beginning to show some signs of life,” Cooper added, noting that gasoline demand last week was up approximately 46 percent when compared to the first week of April.

According to Cooper, some ethanol plants are starting to come back online and others are incrementally increasing production. “It does seem that we are starting to see a light at the end of the tunnel,” Cooper said. “But, make no mistake, we have a long way to go to climb out of the hole that COVID-19 has put us in. By our last count there are still more than 60 ethanol plants that are fully idle today and close to 75 or 80 facilities that are still operating at greatly reduced output rates.” Cooper stressed its clear the industry is continuing to struggle.

He spoke briefly about the Renewable Fuel Reimbursement Program included in the HEROES Act being considered by the U.S. House of Representatives. He said the program would provide vital assistance and emergency relief to U.S. ethanol producers who have seen their markets completely devastated by COVID-19. Cooper said he expects the House to pass the HEROES Act later today and called on the U.S. Senate to include a similar program in its version of the COVID-19 relief bill.

Cooper also addressed a national survey performed by Morning Consult on May 7-9. The poll of 2,000 registered voters found that 59 percent have a favorable view of biofuels, while only 17 have an unfavorable view. In addition, two-thirds of voters said they support the Renewable Fuel Standard, while only 13 percent oppose the program.

“The RFS becomes incredibly important at a time like this because it keeps a demand floor underneath the industry and really provides some certainty in an otherwise very uncertain time,” Cooper said.

However, representatives of several oil refining states have tried to use the COVID-19 pandemic as an excuse to seek waivers of the RFS program. “There is no basis for a waiver,” Cooper said, stressing a waiver can only be issued if petitioners can prove the RFS itself is causing economic harm. However, that’s not the case. It’s the COVID-19 pandemic causing economic harm, not the RFS.

Cooper also briefly discussed issues preventing many ethanol producers from producing alcohol for use in hand sanitizers. He said the FDA has not been clear about what standards and requirements need to be met for alcohol used in hand sanitizer. As a result, he said many producers are sitting on the sidelines waiting for clarity. The situation is making it difficult and confusing for ethanol producers who want to help producer sanitizer products to do so. Cooper said the RFA this week asked the FDA to provide clarity on its requirements.

Neil Koehler, cofounder and CEO of Pacific Ethanol and chairman of the RFA, and Tim Winters, president and CEO of Western New York Energy, also participated in the call.